Internet payment company Citadel Commerce Corp. will no longer process financial transactions from U.S. customers to offshore gaming companies, its parent company Entertainment Systems Inc. announced today.
The move comes after rival firm NETeller withdrew from the U.S. market, following the arrests of two of its founders for conspiring to transfer billions of dollars to promote illegal gambling.
Citadel planned to comply with the new regulations for financial processors that fall under Unlawful Internet Gambling Enforcement Act regulations enacted in October, said the company in a release.
However, the decision to cease U.S. transactions for Internet gambling was made by Entertainment System's board of directors following legal actions against the NETeller executives, the statement said.
The decision, the company said, will have a substantial impact on Citadel's finances, as a large part of its revenues came from processing payments to international online gaming firms for American customers.
The NETeller case, meanwhile, continues to unfold as co-founder Steven Lawrence was released on $5 million bail and into the custody of the FBI Thursday afternoon in the U.S. Virgin Islands.
His conditions of release include surrendering his passport and traveling to New York accompanied by an FBI agent.
John Lefebvre, the other NETeller originator, was also granted $5 million bail and placed under conditions similar to those of Lawrence.
Lawrence's next court appearance is scheduled for Jan. 26 in New York.